Redwood Materials lays off 10% in restructuring to chase energy storage business

At a glance:

• Redwood Materials cuts roughly 10% of staff (about 135 roles) to focus on energy storage growth.
• The battery recycler pivots toward storage while competitors such as Ascend Elements face financial stress.
• CEO JB Straubel affirms the company is “strongest it’s ever been” and highlights momentum with Rivian and Crusoe AI.

Context On The Cuts And Industry Conditions

Redwood Materials has laid off around 135 employees, or roughly 10% of its workforce, as it restructures to better accommodate its growing energy storage business. The cuts come just five months after Redwood cut 5% of its workforce, and three months after it closed a $425 million funding round that boosted the battery recycling company’s valuation to north of $6 billion, as TechCrunch previously reported. It’s been a difficult time in the battery industry lately. Earlier this month, battery recycler Ascend Elements filed for Chapter 11 bankruptcy protection, citing “insurmountable” financial challenges. Some battery-makers have also restructured or gone out of business as the automotive industry in the U.S. has backed away from its most optimistic and ambitious plans to transition to electric vehicles.

The broader industry has seen a wave of realignments as automakers temper EV targets, affecting suppliers and recyclers that had built plans around rapid electrification. For battery materials firms, the pressure manifests in tighter capital availability and more cautious commitments from automakers. Redwood Materials founder and CEO JB Straubel told employees that this new round of cuts is not a sign that the company is heading down the same path. The restructuring is framed as a strategic shift to align resources with the energy storage opportunity rather than a response to a sector-wide downturn.

Redwood’s Strategic Pivot Toward Energy Storage

But Redwood Materials founder and CEO JB Straubel told employees that this new round of cuts is not a sign that the company is heading down the same path. "Redwood today is the strongest it’s ever been," Straubel wrote in an email to the workers who weren’t laid off, according to a copy viewed by TechCrunch. "The materials business is well on the way to profitability and has an exciting roadmap ahead." Straubel noted that Redwood "continue[s] to dominate the US battery recycling market" but also touted the company’s "great momentum" in its new energy storage business. Redwood has recently announced deals with Crusoe AI and, most recently, electric automaker Rivian to provide recycled batteries that can be used to power those companies’ facilities. The company declined to comment beyond the contents of Straubel’s email.

In his message, Straubel wrote that "parts of the company have expanded faster than needed to support the direction" of Redwood. As a result, he said Redwood is making cuts across multiple divisions, including the engineering and operations organizations, according to an employee who was granted anonymity to discuss the layoffs. The moves indicate an internal recalibration to prioritize initiatives with clearer pathways to profitability in storage and recycling rather than spreading resources too thin across experimental projects.

Details On The Layoffs And Employee Impact

In his message, Straubel wrote that "parts of the company have expanded faster than needed to support the direction" of Redwood. As a result, he said Redwood is making cuts across multiple divisions, including the engineering and operations organizations, according to an employee who was granted anonymity to discuss the layoffs. Techcrunch event San Francisco, CA October 13-15, 2026 "We are confident that we can deliver on our critical projects with a smaller team that is more focused," he wrote. "We have successfully adapted to changes in the market that have bankrupted many of our competitors."

Straubel went on to write that he is "more excited than ever with our path ahead as we build the most integrated and cost-effective critical materials and energy storage business in the world." "This is a self-sustaining business and will continue to make this company more valuable over time. We have the team and the technology to do what no other company can," he wrote. Workers who were laid off were told by Redwood’s chief HR officer that the layoffs were made "to sharpen our focus, our work and the size of our teams to support the direction Redwood is going in the future," according to a copy of her email, which was viewed by TechCrunch. Employees who were laid off are receiving severance and paid health benefits, according to Straubel’s email, as well as "career transition assistance."

Company Positioning And Competitive Landscape

Redwood Materials is positioning itself as a critical bridge between end-of-life batteries and raw materials for new manufacturing, a model that is gaining attention as recycling economics improve. The company’s recent pivot toward energy storage aligns with broader utility and industrial demand for grid-scale solutions, where recycled materials can play a role in lowering costs and footprint. While incumbents and new entrants jostle for share in battery recycling, Redwood’s emphasis on domestic processing in the U.S. aims to reduce reliance on imported materials. The deals with Crusoe AI and Rivian signal a tangible shift from collection toward high-value reuse, potentially setting a template for how specialized recyclers integrate with emerging storage ecosystems.

Outlook And Key Considerations For The Sector

As the EV and storage markets evolve, the health of recyclers will remain tied to policy incentives, raw material prices, and the pace of new battery gigafactories. Redwood’s ability to convert its technology and scale into profitable storage offerings will depend on execution across engineering, logistics, and partnerships. Observers will watch how the reshaped organization balances lean operations with innovation, especially as competitors face financial stress. The moves underscore a broader recalibration across the battery value chain, where companies that can align with real demand signals and regulatory tailwinds are better positioned to thrive.